role of Chinese PE-oct.9 accepted version.pdf (515.93 kB)
The role of private equity when portfolio firms go public: Evidence from ChiNext board
journal contribution
posted on 2018-10-31, 08:49 authored by Yao Li, Mike Wright, Louise ScholesLouise Scholes, Ziwei ZhangWe probe into the question of why entrepreneurial firms choose to obtain private equity finance (PE) shortly before going public on the ChiNext Board (the Chinese alternative stock market for smaller firms, part of the Shenzhen Stock Exchange, SZSE). Using unique hand-collected data we find that, compared with non-PE-backed firms, firms with PE equity stakes introduced shortly before the IPO did not reduce IPO underpricing or decrease the offering cost. However PE investors increased the probability of approval when the firms applied to the China Securities Regulatory Commission (CSRC) for listing. We suggest the stock issuance rules for the ChiNext should be reformed to lower entrepreneurial firms’ financing cost and to encourage PE firms to undertake more value-adding activities.
Funding
Yao Li acknowledges the financial support of National Social Science Fund of China (13BJL038).
History
School
- Loughborough University London
Published in
Emerging Markets Finance and TradeVolume
55Issue
12Pages
2851 - 2870Citation
LI, Y. ... et al, 2018. The role of private equity when portfolio firms go public: Evidence from ChiNext board. Emerging Markets Finance and Trade, 55 (12), pp.2851-2870.Publisher
© Taylor & FrancisVersion
- AM (Accepted Manuscript)
Publisher statement
This is an Accepted Manuscript of an article published by Taylor & Francis in Emerging Markets Finance and Trade on 20 November 2018, available online: http://www.tandfonline.com/10.1080/1540496X.2018.1536607.Acceptance date
2018-10-08Publication date
2018-11-20ISSN
1540-496XeISSN
1558-0938Publisher version
Language
- en
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